-- NEWS RELEASE --

Anomalies push GRF
receipts far above estimate

Sales tax declines continue

OKLAHOMA CITY – Collection anomalies
caused total General Revenue Fund (GRF) receipts to surge 31 percent above the
estimate in August, while sales tax collections to the GRF continued a lengthy decline.

As state government’s main operating fund,
the GRF is the key indicator of state government’s fiscal status and the
predominant funding source for the annual appropriated state budget. GRF
collections are revenues that remain for the appropriated state budget after
rebates, refunds and mandatory apportionments. Gross collections, reported by
the State Treasurer, are all revenues collected by the state before rebates,
refunds and mandatory apportionments.

GRF
collections in August totaled $414.5 million, which is $98.3 million, or 31.1
percent, above the official estimate upon which the Fiscal Year 2017
appropriated state budget was based and $7.5 million, or 1.8 percent, above
prior year collections. Total GRF collections through two
months of FY 2017 are $786.3 million, which is $81.1 million, or 11 percent, above
the estimate and $38.7 million, or 4.7 percent, below prior year collections.

“A
series of anomalies put August revenues far above the estimate. Revenues are
somewhat better than a few months ago, but certainly not 31 percent better,”
said Secretary of Finance, Administration and Information Technology Preston L.
Doerflinger.

Personal
income tax collections were the main reason August collections exceeded the
estimate. Personal income tax collections were $85.5
million, or 137.9 percent, above the estimate but just $9 million, or 6.5
percent, above the prior year.

“The
August personal income tax estimate was dialed down this year because August personal
income collections averaged 37 percent less than July personal income collections
for the past three years. That did not happen this year when August personal
income tax collections bucked four years of trends and came in higher than the
prior month,” Doerflinger said.

August
personal income tax collections were also affected by a change from August to
September of the payment of $17.5 million from personal income tax collections
to the Oklahoma’s Promise scholarship fund. The change was made after monthly
GRF estimates were set.

GRF
collections were also driven above the estimate by the other revenue category,
which contains more than 40 revenues from licenses, permits, fees, gaming,
interest, investments and other deposits. Other revenue was $24.3 million, or 39.8 percent, above the estimate and $22.3
million, or 35.4 percent, above the prior year.

“Other revenues were up because
interest earnings were higher than expected and a large insurance premium
deposit was made earlier in the year than usual,” Doerflinger said.

Meanwhile,
sales tax collections to the GRF remained below the estimate, as they have been for 18 of the past 19 months, and below the prior
year, as they have been for 17 of the past 19 months. Gross sales tax
collections as reported by the State Treasurer have been below the prior year
for 15 of the past 19 months.

“The
sales tax decline is concerning and is a better gauge of where things stand
than the aforementioned anomalies. The state will continue seeing sales tax
declines as long as the energy sector stays depressed and until actions are
taken to address the shift of consumer spending from brick and mortar
operations to online outlets and the services sector,” Doerflinger said.

Major
tax categories in August contributed the following amounts to the GRF:

Total
income tax collections of $150.2 million were $79.1 million, or 111.3
percent, above the estimate and $6.3 million, or 4 percent, below the
prior year.

Individual income tax collections of $147.5 million were $85.5 million, or
137.9 percent, above the estimate and $9 million, or 6.5 percent, above
the prior year.

Corporate income tax collections of $2.7 million were $6.4 million, or
70.7 percent, below the estimate and $15.3 million, or 85.2 percent, below
the prior year.

Sales
tax collections of $152.4 million were $9.9 million, or 6.1 percent, below
the estimate and $9.3 million, or 5.8 percent, below the prior year.

Gross
production tax collections of $8.8 million were $3.7 million, or 72.8
percent, above the estimate and $273,300, or 3.2 percent, above the prior
year.

Natural gas collections of $7.3 million were $2.2 million, or 43.6 percent,
above the estimate and $1.2 million, or 14.2 percent, below the prior
year.

Oil collections of $1.5 million were entirely above the estimate and prior
year since the GRF received no contributions from oil tax collections in
August of 2015 and none were estimated for current month collections.

Motor
vehicle tax collections of $17.8 million were $1 million, or 6.2 percent,
above the estimate and $494,700, or 2.9 percent, above the prior year.

Other
revenue collections of $85.4 million were $24.3 million, or 39.8 percent,
above the estimate and $22.3 million, or 35.4 percent, above the prior
year.

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